change or die! investor presentation5,949 (75.7%) 1,578 (19.6%) 1,646 (21.3%) 1,912 (24.3%) sep....

©2012 INFORMATION DEVELOPMENT CO., LTD. All Rights Reserved.

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Investor PresentationFor the six months ended September 30, 2012

November 2012

INFORMATION DEVELOPMENT CO., LTD.

JASDAQ Standardcode:4709


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Today’s presentation

2. 2Q performance overview（difference between 2Q results and the original forecast）

1. What’s ID Group ?

<Reference>

・Performance overview for the year ended March 31, 2012

・Directions of the mid-term management plan


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1. What’s ID Group ?


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Paid in capital:¥592.34million

Established:October,1969

No. of employees:1,734(nonconsolidated)2,223(consolidated)

Paid-in capital: ¥90MEstablished: 1977No. of employees: 235



Paid-in capital: $1.1MEstablished: 2004No. of employees: 129

Paid-in capital: S$1.5MEstablished: 2012

No. of employees: 2

Capital: $2.5MEstablished: 2012

54.4%

100%

100%

80%

100%

100%

NIHON CULTURESOFT SERVICE

SOFTWARE DEVELOPMENT

PURAIDO

ID Wuhan

Became a subsidiary in Dec. 2006

Became a subsidiary in Apr. 2002

* SI division was absorbed by ID in Apr. 2011

ID’s ownership

ID SingaporeEstablished in May 2012

ID AmericaEstablished in Aug. 2012

*ID’s ownership ratios are calculated by number of shares excluding treasury stocks.

About ID Group （as of September 30, 2012）


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ID WuhanWuhan head officeWuxi branchShanghai branch

Operation Center (Suzhou)Tokyo branch（Japan）

IDCSSDPURAIDOID Wuhan Tokyo branch

Business alliance with

ID AmericaEstablished in Aug. 2012

BostonLondon


ID Singapore


ID London branchEstablished in Nov. 2012

Singapore

TokyoWuxiWuhanShanghaiSuzhou

Global network of ID Group

New York


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INFORMATION DEVELOPMENT Group

Consulting Software Development

System Operation Management

Cloud, Security

BPO Sales & ResearchOffice

Consumer Citizen

（ID’s Business Operations-Outsourcing Service 24）

Service menu of ID Group

PURAIDO

Group Coordination

ID Wuhan

SOFTWARE DEVELOPMENT

（SD）

NIHON CULTURESOFTSERVICE

（CS）

Society, Community

Bank Insurance IT,Communication

Service

Energy Public Office Transportation Manufacture

IDSingapore

ID America

INFORMATION DEVELOPMENT（ID）

Londonbranch


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7.7%8.4%

13.4%

26.8%

43.7%

7.7%

44.0%

8.3%

13.2%

26.8%

Individual Japanese

Corporation

Non-Japanese Financial

Institution

Others

Mar. 2012 Sep. 2012

-0.2p

Major shareholders% of total

shares

1 A. K. Corporation 8.7%

2 ID Employee Ownership Account 8.7%

3 Mizuho Trust Systems Co., Ltd. 8.5%

4 INFORMATION DEVELOPMENT CO., LTD 7.5%

5 Taiyo Pearl Fund, L.P. 7.4%

6 State Street Bank and Trust Company 505104 4.4%

7 Mizuho Trust & Banking Co., Ltd 3.5%

8 K.C.S Co., Ltd. 3.5%

9 The Master Trust Bank of Japan, Ltd. (Trust Account ) 2.8%

10 Wahei Takeda 2.6%

0.0p

+0.3p

0.0p

-0.1p

Stock data (as of September 30, 2012)

◆

Shareholding by investor type ◆

Major shareholdersNo. of shareholders: 1,799(25 decreased from Mar. 31, 2012)


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2. 2Q performance overview （difference between 2Q results and the original forecast）


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Industry trend (monthly results of IT industry)

-15

-10

-5

0

5

10

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9

Yearly growth

average*

Yearly growth

average* Trend of IT industry’s monthly sales changes

(Compared with same month of previous year)Trend of IT industry’s monthly sales changes

(Compared with same month of previous year)

*The average is calculated from the total amount added simply together.-15

-10

-5

0

5

10

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9

+2.6% -5.1% -3.7% -2.9% +1.4%

20122011201020092008Source: Above graph data was compiled by ID based on

“Trends in specific Service Sector (METI)”

（％）


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Causes of the difference between 2Q results and the original forecast

・Lower margin projects (booked for future growth)

・Increase in the headcount in the cloud services sales unit

・Underperforming projects

・Refund of corporate tax


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(¥ million) Sep. 2011 (% of revenue)

Sep. 2012Revisedforecast (Sep.11)

(% of revenue) Sep. 2012 (% of

revenue)

YOY %changes

% against revisedforecast (Sep.11)

Revenue 7,733 100.0 7,820 100.0 7,861 100.0 +1.7% +0.5%

Cost of Sales 6,281 81.2 6,478 82.8 6,557 83.4 +4.4% +1.2%

Gross Profit 1,452 18.8 1,341 17.2 1,303 16.6 -10.2% -3.0%

SG&A Expenses 1,123 14.5 1,201 15.4 1,174 14.9 +4.5% -2.1%

Operating Profit 328 4.3 140 1.8 129 1.6 -60.6% -7.5%

Recurring Profit 338 4.4 150 1.9 134 1.7 -60.3% -10.4%

Net Profit 174 2.3 40 0.5 62 0.8 -64.3% +55.6%

2Q Revenue and profits (consolidated)


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(¥ million) Sep. 2011 (% of revenue) Sep. 2012 (% of

revenue)

YOY %changes

Revenue 6,221 100.0 6,413 100.0 +3.1%

Cost of Sales 5,135 82.5 5,430 84.7 +5.8%

Gross Profit 1,085 17.5 982 15.3 -9.5%

SG&A Expenses 882 14.2 980 15.3 +11.0%

Operating Profit 202 3.3 1 0.03 -99.0%

Recurring Profit 261 4.2 315 4.9 +20.5%

Net Profit 145 2.3 301 4.7 +107.2%

2Q Revenue and profits (nonconsolidated)


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7,8617,733

+335

+69

-277

2Q Factors contributing to revenue(consolidated)

(¥ million) Software Development / Maintenance-Increase of order

System Operation Management-Slight increase

BPO, Security, Consulting, etc.- Withdrawal from contracted data input in Japan- Exclusion of one subsidiary from consolidation

Sep. 2011 Sep. 2012


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◆ Gross Profit -148Revenue +127Cost of Sales +276

<Factors contributing to Cost of Sales>・

Labor costs +65・

Production costs +20・

Outsourcing costs +278・

Carrying work in process +1・

Final work in process -1・

Purchasing -68

129(Operating Margin 1.6%)

-37◆ SG&A Expenses +51

<Factors contributing to SG&A Expenses >・

Labor costs -3・

Others +54

328(Operating Margin 4.3%)

-148

-51

2Q Factors contributing to operating profit(consolidated)

Gross Profit decreased

SG&A Expenses increased

Sep. 2011 Sep. 2012(¥ million) (¥ million)

(¥ million)


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(¥ million) Mar. 2012 Sep. 2012 % changes

Current Assets 5,740 5,450 -5.0%

Cash and Deposits 2,583 2,461 -4.7%

Fixed Assets 4,105 3,696 -10.0%Total Assets 9,845 9,147 -7.1%Liabilities 3,457 2,851 -17.5%

Interest-Bearing Debt 1,186 631 -46.8%

Earned Surplus 5,564 5,470 -1.7%

Total Shareholders’ Equity 6,272 6,178 -1.5%

Sep. 2011 Sep. 2012Cash Flows from Operating Activities 340 315Cash Flows from Investing Activities -58 219Cash Flows from Financing Activities -536 -712

2Q Financial position (consolidated)


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4,870(60.5%)

4,884(63.2%)

4,954(63.0%)

2,602(32.4%)

2,314(29.9%)

2,650(33.7%)

534(6.9%)

571(7.1%)

256(3.3%)

Sep. 2010

Sep. 2011

Sep. 2012

+69+1.4%

+69+1.4%

+335+14.5%

+335+14.5%

-277-52.0%

-277-52.0%

7,861

7,733

8,044

+127+1.7%+127

+1.7%

2Q Feature of ID Group 1

Revenue by businessRevenue by business

*Figures in brackets indicate % of revenue.(¥ million)


Software Development / Maintenance

BPO, Security, Consulting, etc.


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4,433(55.1%)

4,101(53.0%)

4,222(53.7%)

2,306(28.7%)

2,374(30.7%)

2,519(32.1%)

1,305(16.2%)

1,257(16.3%)

1,118(14.2%)

Sep. 2010

Sep. 2011

Sep. 2012

+120+2.9%+120

+2.9%+145

+6.1%+145

+6.1%-138

-11.0%-138

-11.0%+127

+1.7%+127

+1.7%

7,861

7,733

8,044


Financial institutions IT, Telecom & Service Others

Revenue by customer



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6,465(80.4%)

6,086(78.7%)

5,949(75.7%)

1,578(19.6%)

1,646(21.3%)

1,912(24.3%)

Sep. 2010

Sep. 2011

Sep. 2012

-137-2.3%-137

-2.3%+265

+16.1%+265

+16.1%+127

+1.7%+127

+1.7%

7,861

7,733

8,044

Revenue by contract


Prime contracts Strategic partners


Prime contracts

Strategic partners

＜ Major customers ＞

Major IT Vendors

・Financial Institutions・IT, Telecom & Service・Others（Manufacture, Transportation, Public, Energy etc.）


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Reason of downward revision (full year forecast)

・Cancellation of expected projects

・Increase in personnel and outsourcing costs due to theunderperforming projects in the 1Q

・Increase in the headcount in the cloud services sales unit

・Handover periods

・Increase in training costs


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(¥ million) Mar. 2012(% of

revenue)

Mar. 2013Originalforecast

(% of revenue)

Mar. 2013Revisedforecast

(% of revenue)

YOY %changes

% against Originalforecast

Revenue 16,137 100.0 16,500 100.0 16,270 100.0 +0.8% -1.4%

OperatingProfit 629 3.9 825 5.0 370 2.3 -41.2% -55.2%

Recurring Profit 659 4.1 825 5.0 380 2.3 -42.4% -53.9%

Net Profit 365 2.3 460 2.8 170 1.0 -53.4% -63.0%

EPS (yen) 49.15 - 61.93 - 22.89 - -26.26 -39.04

Dividend per Share (yen)

21.00 - 21.00 - 21.00 - - -

Performance forecast(full year, consolidated)


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Tighter control over risks and investmentsTighter control over risks and investments

Countermeasures towards Mar. 2014

（Control over risks）1. Prevention and early detection of underperforming projects with

enhanced QMS2. Optimal management of overtime and outsourcing through revised

business processes

（Control over investments）

1. Enhancement of the cloud services sales unit was completed. The investment phase was over. Revenues and profits should increase.

2. Booking of low-margin projects for future growth will be focused on those with shorter payout time.

3. Training investment will be focused on high value-added strategic areas.


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<Reference>

・Performance overview for the year ended March 31, 2012

・Directions of the mid-term management plan


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(¥ million) Mar. 2011 (% of revenue) Mar. 2012 (% of

revenue)

YOY %changes

% againstforecast

Revenue 16,450 100.0 16,137 100.0 -1.9% +0.2%

Cost of Sales 13,209 80.3 13,207 81.8 0.0% +0.7%

Gross Profit 3,241 19.7 2,929 18.2 -9.6% -1.7%

SG&A Expenses 2,402 14.6 2,299 14.3 -4.3% -2.1%

Amortization of goodwill 78 0.5 78 0.5 0.0% -

Operating Profit 839 5.1 629 3.9 -25.0% -0.1%

Recurring Profit 892 5.4 659 4.1 -26.1% +1.4%

Net Profit 447 2.7 365 2.3 -18.4% -22.3%

EPS (yen) 60.21 - 49.15 - -11.06 -14.13

Revenue and profits (consolidated)


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Business Operations Outsourcing

Global development

Promotion ofM&A,

Business alliance(M&A of IN-IN type)Growing out of excessive competition in the domestic market

(M&A of IN-OUT type)Penetrate to overseas growth market

Enhancement of ID Group brand power

The mid-term management plan“Breakthrough 200 !”

Group management upgrading


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Targets for the term

ending in March 2015

Expansion of

global business

Reinforcement of

core competence

Consolidated revenue ⇒ 20.0 billion yenOperating margin ⇒ 6.0%

Overseas subsidiary and branch⇒ to 5 countries

Business alliance ⇒ to 6 companies

Data center management(including Cloud and IT platform services)

⇒ Revenue 12.0 billion yen

<In 3 years> Revenue : 20.0 billion yen, Operating margin : 6.0%The mid-term management plan “Breakthrough 200 !”


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3.9%

6.0%

Mar. 2012 Mar. 2015

Revenue Operating Margin

16.1 bn. yen

20.0 bn. yenin 3 years

+3.9 bn. yen

The mid-term management plan


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12,000(60.0%)

9,969(61.8%)

7,000(35.0%)

5,239(32.5%)

928(5.7%)

1,000(5.0%)

Mar. 2012

Mar. 2015

Plan of revenue by business

+2,030+20.4%+2,030+20.4%

+1,760+33.6%+1,760+33.6%

+71+7.7%

+71+7.7%

16,137

20,000

+3,862+23.9%+3,862+23.9%

(plan)



Software Development / Maintenance

BPO, Security, Consulting, etc.


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Disclaimer

This presentation material contains statements and information about future forecasts, including financial projections, strategies and business plans of INFORMATION DEVELOPMENT CO., LTD.

Such forward-looking statements and information are based on data available when this presentation was prepared, and not based on historical facts.

These forward-looking statements and information also incorporate potential risk and uncertainties caused by changing economic trends, the competitive environment, and other factors. The Company’s actual results, business development progress, and financial situation may differ significantly from forward-looking statements and information contained herein, due to competition in the industry, market demand, exchange rates, and other socioeconomic and political factors.

change or die! investor presentation5,949 (75.7%) 1,578 (19.6%) 1,646 (21.3%) 1,912 (24.3%) sep....

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